North Charleston settles rail lawsuits against state

State keeps northern rail routes; city gets $14.6M and a land swap

Courtesy of City of North CharlestonThis map shows the land swap in which North Charleston will receive a consolidated swath of land on the northern end of the Navy Yard while the state will receive parts of the southern end and the Powerhouse building.

In what North Charleston residents are going to see as either a reasonable compromise or a tail-tucking admission of defeat, Mayor Keith Summey and North Charleston City Council voted 9-1 Tuesday night to approve a settlement with the S.C. Department of Commerce and the Division of Public Railways over plans for a new rail facility in the Navy Yard. The Budget and Control Board is expected to also approve the settlement this morning in Columbia.

In the settlement, the city agrees to drop six lawsuits against the state agencies, allowing Public Railways to build a new intermodal rail yard within the Navy Yard and send new train traffic through the northern end of the former military facility. In exchange, the city will receive $8 million from the state over the next four years, and the state will also take on $6.6 million in debt that the city has incurred through a Tax Increment Financing district on the Navy Yard.

The city and the state will also make a land swap on the Navy Yard, with North Charleston gaining ownership of a consolidated piece of more than 85 acres on the northern end while the state gains a piece of the southern end as well as a crane maintenance building and the iconic Powerhouse building.

The settlement ends years of litigation after the city sued the state to enforce a 2002 memorandum of understanding between the city and the State Ports Authority. The MOU guaranteed new rail lines would be routed through the southern end of the Navy Yard, away from homes and businesses in the Park Circle area — a plan that wasn't popular with some residents in neighborhoods south of the Navy Yard. But there was a legal question as to whether, as Summey argued, "The state is the state is the state," meaning that an agreement with one state agency applied to all other state agencies. Summey said Tuesday night that the total cost of litigation to the city was about three-quarters of a million dollars, but "worth every penny."

Moving forward, the city and the state will split the cost of a surface transportation study to determine the best routes for new train and truck traffic coming through the new rail yard, with a goal of minimizing traffic and noise impacts in surrounding neighborhoods. Jeff McWhorter, president and CEO of S.C. Public Railways, said the current plans for rail routes are "not set in stone," but he recognizes that the city wants new road overpasses built to alleviate train hangups at certain key intersections. Summey said after the meeting that the city would get new overpasses at crucial interchanges on North Rhett Avenue, at Durant and Rivers avenues, and at Taylor Street and Rivers Avenue unless the state agencies can "come up through the surface transportation study and show us something that would work better."

Gov. Nikki Haley and Commerce Secretary Bobby Hitt attended the special City Council meeting Tuesday night and held a press conference afterward in which Haley called the process that led to the resolution "leadership at its finest" on Summey's part. In a classic Southern show of defiance last year, Summey hoisted the "Don't Tread On Me" Gadsden flag in front of City Hall, vowing not to take it down until the matter of the rails was resolved. But Summey's tone was conciliatory Tuesday night.

"We've sometimes smiled at each other, sometimes laughed at each other, and sometimes cursed each other," Summey said. "But out of all of it, at the end of the day, we came out as friends."

The resolution means an end to uncertainty for business owners located on the Navy Yard's northern end, many of whom currently pay rent to Public Railways. Some business owners complained last year that the state division was hiking up rents to drive businesses out. The city and the Noisette Company have been trying to attract new businesses to the Navy Yard since the Navy left North Charleston in 1996, but it was difficult to sell prospective tenants on the idea while the question of the new rail lines' location remained unanswered.

The new rail yard is part of a broader plan for the Charleston port to accommodate bigger ships that will be arriving once new locks are built on the Panama Canal in 2014, allowing an increase in the "Panamax" size limit for trade vessels. Hitt estimated that the state has invested about a billion dollars in preparations for the new port traffic, including an Army Corps of Engineers deepening project in Charleston Harbor to make the port competitive with the Port of Savannah. Haley praised Tuesday night's agreement as a tool for attracting new businesses and jobs to the state.

"This lets me tell every CEO that, yes, we're going to have those post-Panamax ships coming in, this port's going to be the most valuable, it's going to be the most accessible, and we are going to be a true place to have your business and to be successful," Haley said.

The lone dissenting vote Tuesday night came from City Councilman Bobby Jameson, whose district lies in the vicinity of Rivers Avenue and University Boulevard and is not directly impacted by the planned rail yard. His list of objections included a number of cons for the city: a loss of taxable properties, a loss of recreational property, and the fact that the city has agreed to "reasonably consider alternatives to overpasses" in the surface transportation study (In a packet explaining his objections, Jameson writes, "WHO DETERMINES REASONABLY, THE COURTS?"). Jameson says the city's woes on the Navy Yard can be traced back to the Noisette Project, a plan the city announced in 2001 to rejuvenate 350 acres on the northern end of the Navy Yard. Today, little of that plan has been realized.

"We made the worst mistake we could make when we made that Noisette contract, and here we are making another one," Jameson said.

Summey will hold a town hall meeting to discuss the settlement at 6 p.m. tonight in the council chambers at North Charleston City Hall. According to a press release, Summey will explain "the settlement's details, its impact on the community, and what it means for the future of the City, Park Circle, and the former Naval Base."

To read the terms of the settlement between the city and the state agencies, click here.